Thoughts on "The Free Trade Lie Is Exposed"

I missed the furious debate in the comments of last week's essay by gjohnsit, The Free Trade Lie Is Exposed. Ironically, I missed joining in because of an effect of free trade: the crappification of everything. My laptop appeared to have finally blown its power supply. For the past year the battery would drain if left in the PC while traveling, and often would not charge once I settled in and plugged it in. Last week, it simply would not turn on, period. So, I was forced to spend money that, for me, is precariously scarce right now, taking it to a local tech whiz I trusted would either fix it for less than $200 or honestly tell me it needed to be replaced.

Turns out the problem was two little metal clips which hold the small screws attaching the hinges between the screen and the body. The little metal clips has simply failed: free trade is focused on getting the cheapest possible consumer goods, and the metal has fatigued and broken from the stress of opening and closing the screen -- what? maybe 300 to 400 times. The metal bracket on which the hinges rest and thus come lose, and knocked against the little assembly where the electric cord is plugged into the PC. This knocking had jarred loose the electrical connection between this little assembly and the motherboard, and pushed back the pins in the connector. This is something we never hear in the debate about free trade -- the cheap plastic shit made in sweat shops overseas, and how much more often it has to be replaced or repaired than goods made before the era of free trade.

So, I'm in a foul mood to begin with, and it only gets worse as I peruse the adversarial comments to gjohnsit's post. I simply do not know how anyone can regularly visit a site like this, and (I assume) consider themselves progressive, or leftist, or whatever, and argue against gjohnsit to defend free trade. I saw the same phenomenon on DailyKos, but at least there I could categorize defenders of free trade, such as Armando, as arrogant professional class types, lacking any real empathy for working people, who simply did not have the intellectual capacity to move beyond the economic doctrines they had been spoon-fed in college.

We on the left are fond of ridiculing the wrong-wing withe the saying that you can have your own opinion, but you are not entitled to your own facts. And here are the facts on free trade. I have blogged about thus before, and if you want links, search and find what I have written before.

Since the radical free trade / free market era began under Thatcher and Reagan in the 1980s, economic growth rates in the industrialized countries have been slower than they were before.

Since free trade, economic growth rates in developing countries has also been slower than before.

Since free trade, the United States has ceased being a democratic republic, and has become an oligarchic plutocracy. Now, you can argue that free trade was not the sole causal factor, because obviously there ere other causal factors in the rise of our new kleptocratic ruling class.

But here's one fact that is directly caused by free trade. Since free trade, Mexico has become a narco-state that is on the verge of being a failed state.

How do I know that is a result of free trade? History. After Britain forced the Chinese government to accept free trade in the 1830s, what happened to China?

I am frankly disgusted by people who argue in favor of free trade at this point. They are obviously ignoramuses who have refused to study and learn the lessons of history.

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you really feel! Don't hold back, my friend, let it out!
Seriously,i tend to agree with you simply due to empirical Fucking evidence!
I'm kind of a believer in my own lying eyes that way.

Stop These Fucking Wars

peace

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Ya got to be a Spirit, cain't be no Ghost. . .

Explain Bldg #7. . . still waiting. . .

If you’ve ever wondered whether you would have complied in 1930’s Germany,
Now you know. . .
sign at protest march

thanatokephaloides's picture

I am frankly disgusted by people who argue in favor of free trade at this point. They are obviously ignoramuses who have refused to study and learn the lessons of history.

The closest I ever got to the Bojo over at Daily Kos was when I used the term "free traitors" to describe free trade advocates.

The Constitution gives the Federal Government power to tax and regulate international trade for a reason! And you've done a fine job of describing that reason, by the way!

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"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar

"All power corrupts absolutely!" -- thanatokephaloides

Meteor Man's picture

@thanatokephaloides
I like it. It's been a while so I had to look up the OP. I remember reading it, but felt no need to chime in because gjohnsit did a better job of defending his arguments than I could have. Here's the post:

https://caucus99percent.com/content/free-trade-lie-exposed

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"They'll say we're disturbing the peace, but there is no peace. What really bothers them is that we are disturbing the war." Howard Zinn

thanatokephaloides's picture

One small point of order: on any laptop, the hinges are the proverbial Achilles' heel and always have been. Problems at the hinges have cost me more than one!

Bad

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"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar

"All power corrupts absolutely!" -- thanatokephaloides

but when a nation has trade deficits in the billions of dollars as is the case here in the USA, common sense should be enough to let people know that there is nothing free about it.

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Alligator Ed's picture

How about writing an essay over the soon-to-be tariff hikes on steel and aluminum, and their effects on the domestic economy. A video appearing on Al Jazeera English gave a reasoned examination of the implications but was not a very deep analysis. One point stuck out: aluminum and steel workers make up about 600,000 of population whereas domestic workers in industries dependent upon aluminum and steel number 3.5 M.

[video: https://www.youtube.com/watch?v=h9VkL0NUksY]

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Tony Wikrent's picture

@Alligator Ed
Sorry to disappoint, but I will probably decline your request for an essay. I will, however, address the question here. The likely impact of Trump's tariffs on steel and aluminum is going to be some rather steep increases in prices for those materials. However, this will not ignite inflation through the rest of the USA economy, because demand for those materials is severely depressed by the low levels of investment in infrastructure and industrial capital goods.

This brings us to the major point about tariffs: they are pretty much useless and ineffective if they are not combined with a national industrial policy. At the end of January, I discussed this in Protectionism in the age of solar cells. In the 1800s, it was generally understood that the American School of political economy, as it was called, was in opposition to British "free trade" economics of Smith, Ricardo, Mill, etc., and was comprised of three major economic policies: 1) protection of the power of American workers to earn (by not forcing them to compete with the cheap labor of the colonial subjects of the British empire); 2) a national banking system that favored investment in actual industry and agriculture, and discouraged financial speculation, and purchases of imported luxury goods; and 3) internal improvements (what we call today "infrastructure"). I write much more about this at the posting linked above.

These three key American School economic policies were implemented by other countries that successfully industrialized in the late 1800s, most notably Germany, Japan, and Russia. In the 20th century, American School economic policies were implemented by Japan again to recover from the devastation of World War 2, and later by South Korea, Taiwan, Malaysia and other countries. (See James Fallows’ December 1993 article in The Atlantic, “How the World Works.”)

Today's world trade system is designed to obtain cheap consumer goods by ignoring environmental and safety concerns, and ignoring the need to fund worker retirements. It is a system that benefits multinational corporations far more than anyone else. It must be replaced with a new world trade system which is designed to facilitate the $100 trillion in new investments in zero-carbon industries, electricity generation, and transportation, and which benefits all participating countries and their people equally.

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- Tony Wikrent
Nation Builder Books(nbbooks)
Mebane, NC 27302
2nbbooks@gmail.com

gulfgal98's picture

@Tony Wikrent First this:

This brings us to the major point about tariffs: they are pretty much useless and ineffective if they are not combined with a national industrial policy.

And this:

Today's world trade system is designed to obtain cheap consumer goods by ignoring environmental and safety concerns, and ignoring the need to fund worker retirements. It is a system that benefits multinational corporations far more than anyone else.

The current system has been designed by neoliberal globalists and promoted by bought off politicians such as the Clintons and Barack Obama whose interests lie not in the economic health of the people who actually produce the goods and services of any country, but in the corporatization of the world. Pride in the quality of work and product has been long sacrificed in favor of meeting production quotas.

Most of the inhabitants of the world are "throw aways" to the globalists. We are cogs in the neoliberal economic wheel to be used and discarded when we cease to be of use to their system.

Excellent essay, Tony.

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Do I hear the sound of guillotines being constructed?

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

Cassiodorus's picture

Remember tho that this place is mostly for refugees from Daily Kos, and that refugees are not always better than the places whence they left. The Mayflower Pilgrims, for instance, those icons of Thanksgiving, were refugees from countries they were too intolerant to live in who went to Massachusetts to live off of the native peoples of that region of the world (before killing them off).

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“When there's no fight over programme, the election becomes a casting exercise. Trump's win is the unstoppable consequence of this situation.” - Jean-Luc Melanchon

It's not really nation-states that we're dealing with, it's multinational corporations.
Essentially what has happened is a multinational corporate coup, through the purchase of political influence in what were once sovereign nations (or at least the trade/macroeconomic policies of what were once sovereign nations), allowing multinational corporate interests to make the lion's share of the profits from deregulated globalization, as the 'savings' are not being fully passed down to the consumer (contrary to 'popular' belief).
Multinational corporate interests are now being served at the expense and wellbeing of all nations through which they operate.
The threat from 'protectionists' is that they want to put the trade policies of the biggest customer (US) ahead of multinational corporate interests, which would upset their entire one-world government apple cart, eventually causing export-based countries to start looking for ways to strengthen their own consumer-base(s) and domestic economies to offset the reduced business coming in from their biggest customer (US), or begin reducing production, which they really can't afford if they want to sustain their domestic economies.
A balanced US trade policy (i.e. a reversal of the multinational corporate coup) would result in increased living standards worldwide (at the expense of multinational corporations that have been making the lion's share of the profits from deregulated globalization).
And anyone who thinks the 'savings' are being fairly passed down to the consumer, I've got a bridge to sell you.

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Mike Taylor

Free trade is as real as free markets. Everything is rigged in favor of the house. I support Trump's tariffs. Funny how everything that helps workers and the middle class is tantamount to doom for the globe.

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"Religion is what keeps the poor from murdering the rich."--Napoleon

Not Henry Kissinger's picture

So I'm a traitor/ignoramus/arrogant/Armando for thinking that protectionism is (and always has been) the shortsighted policy of greedy industrialists that hurts consumers and is a major cause of every big war in the last two hundred years?

Good to know.

There's nothing wrong with free trade. What's wrong is that we allow the benefits of that trade to flow to only a select few at the expense of the rest of us.

But hey, why spoil a cute little epithet like 'free traitor' with such an obvious explanation.

There's a good discussion about all this at Pat Lange's place. I found this comment especially trenchant:

The reason we have so many things in the US that are now made in China is not because China has tariffs in place; it's because US companies moved their manufacturing facilities over to China, so they wouldn't be forced to pay their workers so much. That, and automation (!), are the two primary villains in the erosion of the American industrial base.

...

A) America's heavily industrialized products are generally rejected (Harleys and Levis aside) by foreign countries because they are inferior and don't meet the needs of the consumers in the rest of the world. American washing machines are huge monstrosities, compared to the washing machines one finds in Asia. Capacity in each are about the same, but relatively little innovation has occurred in American washing machines because Americans have a lot more space than most of the rest of the world does, and they don't really care if their new machine comes with fuzzy-logic auto-adjustment. Space for the rest of the world, though--particularly in Asia--is a really important consideration. The same goes for American cars. The same goes for lots of things.

B) American management generally doesn't worry over these things, b/c the US is in itself a market of >300 million and relative to its continental neighbors (Latin America), it's the apex economy. This status has allowed the American corporations that serve the needs of Americans to be quite lazy in their outlook. Selling one million washing machines each year makes quite a lot of money, and R&D requires a significant investment--so why bother with doing it if you can just look at what Japan's doing, and copy that in the safe and secure knowledge that nobody from the US is going to be buying a Japanese washing machine?

C) The Metric System. Duh. Weapons manufacturers in the US switched over long ago. American automakers...nope. Car accessories are a huge secondary market for auto-manufacturers. If a US auto-accessory manufacturer wants to get into secondary markets, it will need to create TWO assembly lines: one for Americans in the Imperial system, and one for exports, in the metric system.

D) Apple manufactures its phones abroad, using brokers who engage in horrific abuses of their workers. Those phones could be made in the US, by American workers, who earn a living wage. You should be asking yourself why they aren't--not pretending as if it's actually the fault of Latino migrants and Chinese competition.

E) When was the last time you bought a shoe that was Made in America? Or clothes, for that matter? Do you think that's China's fault? NO! That's the business elite of the US, exporting all those jobs to foreign locales. Since NAFTA, clothing mfg has pretty much been exported, in its entirety, to Latin America and Asia. Taiwan used to be the place where lots of shoes were made; no longer, b/c a living wage here is now too expensive. Those jobs have moved to Vietnam, Indonesia, China, and the Philippines. And yes: the workers who make them barely earn enough to feed themselves and a child or two. For many, attending school is even too expensive a luxury.

Absolutely NONE of these erosions of the US industrial and mfg base has anything at all to do with tariffs. Each is the result of either actions by our managerial class and ruling elites, or the logical consequence of an American Exceptionalism that believes the world should follow the US, rather than the US work as an equal among many.

Putin reminded us all of the potentially fatal consequences of such an attitude just a couple of days ago. Implementing a bunch of tariffs are precisely the wrong response.

Bottom line: whether its Russia with politics or China with trade, we need to stop blaming the rest of the world for our own homegrown problems.

And we CERTAINLY need to stop calling people names who have legitimate reasons for not agreeing with knee jerk Presidents and their simplistic, buck-passing, dangerous, and ultimately futile policies.

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The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?

Tony Wikrent's picture

@Not Henry Kissinger
In answer to your first question: Yes. Especially since you are explicit in your belief that "protectionism is ... a major cause of every big war in the last two hundred years." Yours is an assertion that has been repeatedly debunked.

It's no surprise, then, that you completely ignore the issue of free trade, not protectionism, causing the Opium Wars, and the failed narco-states of Mexico in the late 20th century, replicating the historical example of China in the early 19th century. This is what I consider the most weighty value judgement against free trade. Or perhaps you agree with mainstream economists that there is no room for normative judgments in economics? Or are you just a typical westerner, with little concern or interest in what experts from other countries have to say:

Adam Smith: ‘Intellectual Prostitute’ For British East India & Slave Traders

Smith-Ricardian ‘Free Trade’ Justified Slave Trade

Amitav Ghosh on "Opium and Empire"

When these historical embarrassments are pointed out to the "free marketeers" of today, they really freak out, like in this article from the Cato Institute.

But the plain fact is that Adam Smith was paid by slave traders to come up with a justification for their immoral exploitation and murder (how many captives died in transit?) of other human beings. Back in Adam Smith's time, his "free market" doctrine was called laissez faire and it was emphatically rejected by the first Secretary of the Treasury, Alexander Hamilton. (Unfortunately, though the slave trade was ended in the U.S. by the early 1800s, the institution of slavery itself continued and festered until it helped cause the rupture of the 1860s.) It was not until the 1960s and 1970s, when laissez faire was repackaged as "free markets" and "free trade" by Milton Friedman and sold to Americans as "freedom to choose" that the economic doctrines of the slave trade and opium wars began to destroy American from within.

Henry C. Carey was the best known USA economist of the mid-1800s, and was Lincoln's economic adviser. So if you don't like those unwashed colonials from India and the Phillipines demolishing the theory of free trade, here's fellow American Carey:

Commerce, Christianity, and Civilization Vs. British Free Trade: Henry Carey's replies to the London Times, February 1876

Commerce, Christianity and Civilization Vs. British Free Trade: Henry Carey on the British Forcing Opium on China

Applying the word "traitor" to advocates to free trade is entirely accurate. In USA, the history of political economy is almost hopelessly muddled by the fact that Hamilton's policies were continually contested by the free trade faction--which was largely centered in the slave-holding aristocracy of the South. Hamilton devised a national economy in which continual improvements in the technological modes of production--replacing animal and human muscle power with ever more powerful machinery--were the most important causal factors of creating national wealth. In opposition to Hamilton's political economy was the feudal economics of the British oligarchs and the Southern slaveholders, in which the major determinants of creating wealth were holdings of already existing wealth, most especially land, slaves, and species.

From The conspiracy of free trade: Anglo-American relations and the ideological origins of American globalization, 1846-1896, PhD dissertation at the University of Texas, Austin, 2011:
America’s economic nationalists in turn considered these Cobdenite [free trade] efforts as part of a vast, British-inspired, free trade conspiracy. This period’s leading protectionist intellectuals alternatively held an Anglophobic belief in infant industrial protectionism and government-subsidized internal improvements.

Henry Carey wrote in 1851:

Men are everywhere flying from British commerce, which everywhere pursues them. Having exhausted the people of the lower lands of India, it follows them as they retreat toward the fastnesses of the Himalaya. Afghanistan is attempted, while Scinde and the Punjab are subjugated. Siamese provinces are added to the empire of free trade, and war and desolation are carried into China, in order that the Chinese may be compelled to pay for the use of ships, instead of making looms. The Irishman flies to Canada; but there the system follows him, and he feels himself insecure until within this Union. The Englishman and the Scotsman try Southern Africa, and thence they fly to the more distant New Holland, Van Dieman's Land, or New Zealand. The farther they fly, the more they must use ships and other perishable machinery, the less steadily can their efforts be applied, the less must be the power of production, and the fewer must be the equivalents to be exchanged, and yet in the growth of ships, caused by such circumstances, we are told to look for evidence of prosperous commerce!

The British system is built upon cheap labour, by which is meant low priced and worthless labor. Its effect is to cause it to become from day to day more low priced and worthless, and thus to destroy production upon which commerce must be based. The object of protection is to produce dear labour, that is, high-priced and valuable labour, and its effect is to cause it to increase in value from day to day, and to increase the equivalents to be exchanged, to the great increase of commerce. (pp. 71-72)

In April 2011, Ian Fletcher posted on Huffington Post a summary of his book, Free Trade Doesn't Work: What Should Replace It and Why, detailing the faulty assumptions behind the Theory of Comparative Advantage, the theoretical basis of free trade:

Dubious Assumption #1: Trade is sustainable.
Dubious Assumption #2: There are no externalities.
Dubious Assumption #3: Productive resources move easily between industries. 
Dubious Assumption #4: Trade does not raise income inequality.  
Dubious Assumption #5: Capital is not internationally mobile.
Dubious Assumption #6: Short-term efficiency causes long-term growth. 
Dubious Assumption #7: Trade does not induce adverse productivity growth abroad.   

Economists who have attempted to honestly evaluate the effects of free trade agreements such as NAFTA have usually felt compelled to admit that the effects are not as beneficial as they first believed. Robert Scott of the Environmental Policy Institute concludes that the 17-year-old North American Free Trade Agreement, which was supposed to produce trade surpluses and hundreds of thousands of jobs in the United States, actually created "trade deficits with Mexico totaling $97.2 billion [and] displaced 682,900 U.S. jobs."

The historical, statistical fact is that many countries had higher
rates of GDP growth and income growth, and significantly less income
inequality BEFORE the current world regime of trade agreements came into
effect. A study by the Center for Economic and Policy Research in February 2014 noted:

From 1960-1980, Mexican real GDP per person almost doubled,
growing by 98.7 percent. By comparison, in the past 20 years it has
grown by just 18.6 percent.  Mexico’s per capita GDP growth of just 18.6
percent over the past 20 years is about half of the rate of growth
achieved by the rest of Latin America. If NAFTA had been successful in
restoring Mexico’s pre-1980 growth rate – when developmentalist economic
policies were the norm – Mexico today would be a relatively high income
country, with income per person significantly higher than that of
Portugal or Greece.  It is unlikely that immigration reform would be a
major political issue in the United States, since relatively few
Mexicans would seek to cross the border.

After NAFTA, there was also a
decline in U.S. exports to Mexico of crucial capital goods such as rail
locomotives, machine tools, farm tractors, construction equipment and
electricity generating equipment. Proponents of free trade have argued that these types of declines were caused not by NAFTA, but by the peso crisis which occurred soon after NAFTA took effect. But if NAFTA resulted in economic growth, you would expect these declines to eventually be reversed, with the statistics showing improvement ten or fifteen years later.

They do not.

According to Rolling Stock: Locomotives and Rail Cars, Industry Trade and Summary, Publication ITS-08, by the United States International Trade Commission, March 2011, from 2000 to 2009, the locomotive fleet in Mexico has shrunk 19.8 percent, from 1,446 to 1,160. (Table C.124, page 108)
In Canada, the number of freight locomotives fell from 2,979 to 2,671, a fall OF 10.3 percent (Table C.9, page 103). Mexico's active rail car fleet fell by 19.8 percent, from 34,764 in 2000, to 27,873 in 2009. (Table C.16, p110).

What happened in Canada is even worse: a 26.5 percent collapse in
rail freight cars from 105,096 in 1999 to 77, 278 in 2008. (Table C10,
page 104).

This does not appear to me to be a national economy improving. These are
national economies in collapse - exactly what the proponents of
protectionism argued would happen through most of the 1800s, and what
opponents of NAFTA argued would happen. NAFTA is is not helping the
Mexican and Canadian economies improve

Manuel Perez-Rocha, an associate fellow at the Institute for Policy
Studies in Washington, D.C., and a Mexican national, said in a review of NAFTA in January 2014,

During NAFTA, Mexico has had the slowest rate of economic
growth than [with] any other previous economic strategy since the 1930s.
From 1994 to 2013, Mexico’s gross domestic product per capita has grown
at a paltry rate of 0.89 percent per year.” Additionally, “During
NAFTA, Mexico’s economy grew much slower than almost every Latin American
country. So to say that NAFTA has benefited the Mexican economy is also a
myth. It has boosted trade and investment, but this has not translated
into meaningful growth that generates jobs

In September 2013, three economists, Michael Elsby, Bary Hobijn and Ayşegül Şahin, released the results of their analysis at the Brookings Institution:

The economists——looked at a broad measure of employee compensation capturing all of labor’s share of GDP, and tested it against several different models to figure out what exactly led to this kind of decline. Unsurprisingly, as the chart above shows, they saw a fall in income paid to workers in manufacturing, trade, transportation and utilities starting in 1987, reflecting fewer workers and lower wages.

They ran the regressions, and they found the biggest single thing responsible for falling wages across the entire labor force was import competition. This, they found, explains 3.3 percentage points of the 3.9-percentage-point decline in wages as a share of GDP (that graph at the top) over the past 25 years.

In April 2015, the Royal Economic Society summarized the work of two economists, Hufbauer and Schott, who had written a 1992 study on the expected effects of NAFTA. One source Hufbauer and Schott relied on was a seven-volume report for the World Bank. But what the RES was interested in, was that Hufbauer and Schott had reevaluated the effects of NAFTA in 2005.

Investment largely shifted from portfolio investment to FDI [foreign direct investment], as
predicted. However, as Hufbauer and Schott say, ‘Contrary to the
expectation that foreign investment would be concentrated in the
lowest-skilled activities, the principal impact of FDI in manufacturing
was to raise the demand for semi-skilled workers and the wage premium
paid to them’. In fact, FDI mostly flowed into existing assets, not into
increasing production.10

Other issues feature in the 2005 report that were not prominent in the
earlier one. There was a sharp contraction in the number of small and
medium sized enterprises, consistent with increased exposure to
competitive pressure. There were falls in poverty and inequality -
likely to have resulted mainly from the increase in employment following
the peso devaluation, and from the Progresa programme of conditional
cash payments.11
Another unexpected development was related to dispute settlement: ‘In
practice, however, the rules … have fostered litigation by business
firms against a broader range of government activity than originally
envisaged’. Thus, concentration in enterprise ownership, changes in
poverty/inequality, and the extent of dispute settlement, as well as the
devaluation, were not even included in the list of predicted effects.
And as we have seen, that list of predictions did not turn out to
correspond with what actually happened post-NAFTA.

In late 2013, economists David H. Autor, David Dorn and Gordon H. Hanson published a study in The American Economic Review, The China Syndrome: Local Labor Market Effects of Import Competition in the U.S. They concluded that from 1990 to 2007, the share of all manufacturing
imports coming from low-income countries increased from 9 percent
to about 28 percent, and that this increase in cheap imports accounts for about one-quarter of the aggregate decline in
United States manufacturing.

Our analysis finds that exposure to Chinese import competition affects local labor markets not just through manufacturing employment, which unsurprisingly is adversely affected, but also along numerous other margins. Import shocks trigger a decline in wages that is primarily observed outside of the manufacturing sector. Reductions in both employment and wage levels lead to a steep drop in the
average earnings of households. These changes contribute to rising transfer payments through multiple federal and state programs, revealing an important margin of adjustment to trade that the literature has largely overlook.

If free trade is so disastrous in its actual effects, the question that must be asked is: Why do political and economic elites continue to cling to free trade? In Free Trade Is Elites Betraying Their Own Populations, Ian Welsh explains.

The renunciation of tariffs and trade controls is a form of betrayal by
in-country elites who have capital to deploy outside the country against
everyone else in the country. If a foreign country has lower wages,
worse environmental standards, horribly unsafe or coerced labor
conditions, this is a comparative advantage.... Internally, free trade is used to create betrayals. Trade deals do not
allow environmental protections, do not allow high wages, and do not
allow fair treatment of workers. Otherwise, you aren’t competitive and
the usual remedies, like tariffs and subsidies, are not allowed by those
same trade deals. This allows oligarchs in every country involved in
the deal to put downward pressure on wages, regulations, benefits, and
even standards of humane treatment, in the name of “competitiveness.”

....Note, again, that this is in oligarchs’ best interest EVEN if their
country loses. Greek oligarchs, post-crash, are doing just fine. African
potentates walk away with multi-million dollar bank accounts even as
their own citizens starve to death. Business owners want to push down
wages and costs, no matter where they are. This devastates countries and
even the citizenry of many of the winning countries (like the US), but
it benefits the few a great deal in relative terms.

You repeatedly argue that the fault lies with American management, not with free trade, for moving production overseas. In this you are using a smaller truth to deny a larger truth. The entire point of protection is to prevent the national economy from being opened to imports that can be produced cheaper in countries that do not protect the environment and workers and which do not invest in a social safety net comparable to ours.

You also point to automation as a cause. That is the standard professional class excuse. When most US factories were relocated overseas, they were NOT replaced by new factories equipped with the latest and best new production equipment. In most cases, what literally happened was that the US factory was disassembled, the production equipment crated and packed into containers for shipment, then shipped overseas, and the whole production line reassembled. There was no new, fully automated equipment. There was no new robots replacing workers. If there were, why are Chinese workers three times more likely to be killed on the job? These gruesome facts point to something that almost everyone overlooks, or do not want to admit: the US production sent overseas was NOT replaced by newer, more efficient technologies and production equipment. Why would someone not want to admit US production sent overseas was NOT replaced by newer, more efficient technologies and production equipment? Because insisting that “automation and robots are replacing all those jobs” allows them to avoid facing the truly murderous implications of what they want to believe about how the world works. It allows them to cling to their belief in the neoliberal lie that “free market” capitalism delivers the greatest benefits to the greatest number of people. It allows them to avoid having to face the harsh reality that what they believe is literally killing people.

Since you whine about being called names, to close, I will quote Thomas Paine, from The Crisis: "words were made for use, and the fault lies in deserving them."

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- Tony Wikrent
Nation Builder Books(nbbooks)
Mebane, NC 27302
2nbbooks@gmail.com

Not Henry Kissinger's picture

@Tony Wikrent Would you mind chopping up your graduate thesis into at least a few comments so I can deal with the issues separately?

I'll just hit a few lowpoints:

Especially since you are explicit in your belief that "protectionism is ... a major cause of every big war in the last two hundred years." Yours is an assertion that has been repeatedly debunked.

And yet...not even a single debunking link.

Tell you what, Tony. You name one major war in the past two hundred years that wasn't presaged by a trade war, and Ill retract my whole comment.

It's no surprise, then, that you completely ignore the issue of free trade, not protectionism, causing the Opium Wars, and the failed narco-states of Mexico in the late 20th century, replicating the historical example of China in the early 19th century.

You are confusing free trade with mercantilism. The British Opium Wars were predicated on expanding a British monopoly over maritime trade with the Far East. It's not free trade if only one country is allowed to do it.

And while we're on China, you conveniently ignore the importance of US 'Open Door' policy of the late nineteenth century in curbing those abuses.

The Open Door Policy is a term in foreign affairs initially used to refer to the United States policy established in the late 19th century and the early 20th century, as enunciated in Secretary of State John Hay's Open Door Note, dated September 6, 1899 and dispatched to the major European powers.[1] The policy proposed to keep China open to trade with all countries on an equal basis, keeping any one power from total control of the country, and calling upon all powers, within their spheres of influence, to refrain from interfering with any treaty port or any vested interest, to permit Chinese authorities to collect tariffs on an equal basis, and to show no favors to their own nationals in the matter of harbor dues or railroad charges.

So you see, US free trade policy actually ended the Opium War-type economic exploitation of China by mercantilist European powers. It didn't cause it.

Also too, Mexico is exactly the situation the author of the comment I quoted is referring to when he talks about the US being the apex economy of the region, and so able to economically exploit Latin American countries through mercantilist agreements like NAFTA.

And that's the point: NAFTA isn't actually Free Trade at all. It's actually just a way for Big Money interests to buy their way into poorer countries in order to take over markets and arbitrage cheaper labor. Pretty soon all that fast money sloshing around drives an already corrupt government over the edge, and you have the beginnings of a failed state.

But tariffs aren't going to fix the Mexico problem, Tony, because the problem is not in Mexico. The problem is in the US - in the boardrooms of multinationals where people get paid vast amounts of money to think up ways to fuck poor people over on both sides of the border.

And THAT's the point you are truly ignoring.

Oh, couple of other things:

Applying the word "traitor" to advocates to free trade is entirely accurate.

As a courtesy, I'd appreciate a head start if/when your goon squad decides to come for me.

Since you whine about being called names, to close, I will quote Thomas Paine, from The Crisis: "words were made for use, and the fault lies in deserving them."

Ad hominem attacks are not welcome at C99, Tony. Just so you know.

And thank you for quoting Thomas Paine. He was indeed a fine man, and like every one of his Revolutionary contemporaries, believed strongly in Free Trade.

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Tony Wikrent's picture

Which standard are you applying? "protectionism is ... a major cause of every big war in the last two hundred years."? Or "presaged by a trade war"? The latter would be meaningless.

American Revolution
War of 1812
Greek War of Independence
Mexican–American War
Crimean War
US Civil War
Wars of Italian Unification
Franco-Prussian War
Bolshevik Revolution and Russian Civil War
World War 1
World War 2
Algerian War of Independence
Angolan War of Independence and Civil War
1948 Arab–Israeli War
Six Day War
Yom Kippur War
Nigerian Civil War
Eritrean War of Independence
Bosnian War
Western Sahara War
Sudanese Civil Wars
Somali Civil War
Rwandan Civil War

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- Tony Wikrent
Nation Builder Books(nbbooks)
Mebane, NC 27302
2nbbooks@gmail.com

Not Henry Kissinger's picture

@Tony Wikrent @Tony Wikrent @Tony Wikrent

International trade conflicts lead to international militarily conflicts and always have. Presage means come before - an omen.

  • American Revolution (fought to end British mercantilism in the colonies)
  • War of 1812 (fought to stop British interdiction of US trade to Europe)
  • Mexican–American War (major goal of the US was to establish control and security of the Santa Fe Trail trade route between New Mexico and Missouri.)
  • Crimean War (British attempt to establish a maritime trade monopoly in the Black Sea)
  • US Civil War (See the Morrill tariff of 1861. Se also the 'Tariff of Abominations' et al as an earlier catalyst for the secessionist movement.)
  • Franco-Prussian War (fought over mercantile control of trade routes through rich border provinces of Alsace-Lorraine and to establish most favored nation trade status for Germany vis a vis France.)
  • World War I (see Franco-Prussian War, see also expansion of German mercantile empire at the expense of the British)
  • Bolshevik Revolution and Russian Civil War (see WWI, see also disruption of Russian European trade during conflict leading to widespread poverty)
  • World War II (See WWI, see also US embargo of Dutch East India oil a direct catalyst for Pearl Harbor, see also major trade wars of the 20's and 30's deepen worldwide depression leading to rise of fascism)
  • Cold War (George Kennan propose economic containment of Russia, eventually morphing into a strategy of military containment)
  • Korean War (see Cold War)
  • Vietnam War (see Cold War)
  • Gulf War (oil trade)
  • Iraq War (oil trade, economic sanctions in the 90's lead to deaths of half a million children.))
  • Afghan war (interdiction of trade between China and Iran and other central Asian powers)

Most of the various civil wars you cite are either colonial wars of independence from US & European mercantile exploitation (see eg. Algeria, Eritrea, Rwanda, etc.) or Cold War proxy fights (Middle East, Greece, etc.)

You also forgot the Spanish American War (fought over mercantile trade in the Caribbean and Philippines), Libya Civil War (to stop Qadaffi's pan African trading bloc), as well as Ukraine and Syria (oil and gas trade).

So despite your long list (and a bunch of others you neglect to mention) you have yet to cite one major war of the last two hundred years where a trade conflict was not a primary cause of a military conflict.

Debunked.

Any questions? I'll wait.

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The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?